Ontario should test out plan for ‘basic income’

TheStar.com – Opinion/Editorials – Former senator Hugh Segal has come up with what can best be described as a modest proposal. It rejects the type of revolutionary upheaval in social programs embraced by the more enthusiastic proponents of basic income
Nov. 7, 2016.   Editorial

The idea of providing a basic minimum income for everyone – no strings attached – is an alluring one that has been kicked around for decades. Now the Ontario government is edging closer to testing the idea with a proposal that highlights both some of the advantages and many of the problems inherent in the idea.

Supporters of the basic income concept typically argue that it would be a win-win. It would lift people out of poverty while freeing them from the petty humiliations of complying with byzantine welfare rules. It would let them earn more money without being penalized. And it would save tax dollars by slashing bureaucracy and reducing the heavy health and social costs of poverty.

That’s the dream. But designing a plan that’s effective, financially affordable and politically acceptable has proven beyond the wit of social reformers.

That hasn’t deterred the Wynne government, which asked former senator Hugh Segal, a long-time supporter of the concept, to suggest how Ontario could dip its toes into the basic income waters by running a limited pilot project. The idea is to study what the effects would be of providing people in poverty with a basic income, as a step towards designing a permanent system.

What Segal has come up with can best be described as a modest proposal. It rejects the type of revolutionary upheaval in social programs embraced by the more enthusiastic proponents of basic income – what Segal dismisses as the “Big Bang” approach.

Instead, under his plan a single person in poverty would receive a monthly payment of about $1,320 – or $15,840 a year. A person with disabilities would get $500 a month more. The money would be non-taxable, there would be no eligibility rules (aside from being poor), and participants could keep more of any extra money they earn.

That’s a lot more generous than the existing social assistance program, Ontario Works, which pays a single person a maximum of just $706 a month, or the Ontario disability program, which pays up to $1,128.

But the fact is that even Segal’s proposed “basic income” level would leave a single person far below the province’s so-called poverty line, or Low Income Measure, of about $21,000 a year.

To actually get out of poverty, Segal acknowledges in his report, people would not be able to rely only on his proposed basic income. “It is their labour that will accomplish this,” he writes. In other words, to get up to the poverty line they’d have to go out and earn the difference.

If anything, Segal’s proposal only underlines how grossly inadequate Ontario’s existing social assistance payments are. To expect someone to live on about $700 a month, especially in a city like Toronto, is to accept bad health, shoddy housing, social exclusion, petty crime and all the other ills that go along with deep, entrenched poverty. Not to mention the scrutiny and stigma that goes along with it.

The basic income concept is a laudable attempt to break that cycle. But the risk here is that it becomes an excuse to delay improvements in the current system for years to come – at least three years just to run Segal’s proposed pilot study.

More broadly, his deliberately tentative approach would not put in question any other social programs or threaten the bureaucracies that oversee them. Given that supporters of basic income generally claim enormous savings from doing away with armies of administrators, it raises the question of where the money to finance a more generous system will come from.

Nonetheless, it takes political gumption to get even this far, and the province should press ahead with testing out Segal’s proposal, or some variation of it. It may not be possible – or indeed desirable – to blow up the entire network of social programs and start afresh, but even tinkering at the edges can make things better.

And in the meantime, the government should not forget those struggling to survive on the little that the existing system offers them.

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1 Comment

  1. Hugh Segal has been working on a report for the Ontario government in which he proposes the creation and implementation of a basic income program in the province. This program would, in theory, help low income Ontarians rise out of poverty by providing them with a guaranteed basic income. Some might ask what the difference is with the current Ontario Works and Ontario Disability Support Program. Quite simply, it’s a one size fits all system replacing the current patchwork thus reducing unnecessary bureaucracy, or so it should, however, Segal’s report does not mention changes in the administrative structure of the program. His report also proposes a program which, despite providing much more than the current system, still leaves Ontarians well below the poverty line.
    Although this is a new idea in Ontario, many countries around the world have implemented basic income programs and the idea has even been tested here in Canada. During the 1970’s, a basic income program was tested in Manitoba, this program ran well and showed significant promise however, due to change in government, funding was cut and as the program was phased out so was the data collection thus leaving us with little information on the long term impacts. Hugh Segal is definitely heading on the right track with this proposal but seems to be simply flirting with it rather than going all in. The program he is proposing does have the benefit of encouraging low-earners to seek out employment but doesn’t do much to help them live healthier lifestyles nor does it address the underlying issues of poverty like some of the more progressive programs in Europe.

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